Government The Inquiry Into Collapse Of Kaupthing Iom

[bellyup]

What I completely missed is that Bellyache had admitted that he had an instant access account. And yet he was bellyaching about having put his money into Derbyshire, not KSF.

 

Anyway, seems I was wrong about many fixed term accounts. But not all!

 

S

 

 

 

The point that I was making ( that naturally you missed ) is that I put my money into a reputable Bank on the Isle of Man - The Derbyshire Building Society and had done so for many years.

 

 

Now all I receive is bile hatred and envious glee coming from an IOM resident who like all other IOM residents have reaped the benefits of depositors like myself for. decades.

 

This does not look good nor will it encourage anyone else to take their business there.

 

Why don't you try looking for a job to try and earn some money whilst awaiting whatever you will get when this is resolved instead of spending your time on here aliaenating(sp) people would otherwise be sympathetic to your cause.

 

You are an embarrasment to all those who have a legitimate greivance (yourself included)

 

 

Because I like many of the depositors have worked hard for a life time already.

I am not looking for sympathy.

I am bringing the truth of what has happened out into the open

 

Of course it unpalatable .

 

Its no embarrassment to me I'm not promoting myself as a SAFE and SECURE FINANCIAL CENTRE.

[manshimajin]

For clarification, here's a T&C extract from an IoM subsidiary of one of the Irish banks "Requests for partial withdrawals ... or repayment ... in full before the Maturity Date are at the absolute discretion of the Bank and may be refused. A partial withdrawal ... or repayment ... before the Maturity Date will be subject to a penalty charge to compensate the Bank for the costs and expenses incurred ..."So, in relation to breaking fixed-term deposits, as with so many other things, your mileage may vary.

This T&C is about withdrawing money from the bank you invested your money with. The Derbyshire/KSF was about one institution shipping depositors funds to another institution without any recourse for the depositors (it would seem) to consider whether they wanted their funds to be relocated to an Icelandic owned bank.

 

Maybe it is an issue that the IOM regulator should have been much more concerned about; essentially the Derbyshire BS appears to have been locking its depositors in with an Icelandic owned bank at a time when the Icelandic banking system was already being identified as risky in the financial media. Doesn't say much about the Debyshire Buiding Society to me - and of course they have disappeared now except as a sub-brand of Nationwide. The Derbyshire Building Society seems to have treated its clients in a very shoddy way.

[pongo]

Not agreeing or disagreeing with you Manshimajin - but worth remembering that Derbyshire Building Society, the UK parent, was basically rescued by Nationwide because it was in trouble.

 

As above, 'transfer of business' is a normal part of terms and conditions. Eg here at the Internet Archive there is a snapshot of the Terms & Conditions of the Derbyshire (IOM) from www.derbyshire.co.im from July 2007.

 

52. We are entitled to, and reserve the right, upon giving you not less than one month ’s notice in writing, to transfer your funds to a third party offering similar deposit facilities provided that the terms and conditions shall in all material respects remain the same. Upon transfer our liability to repay your funds to you will cease.

 

Here at the Internet Archive (Dec 2006) in pdf format are the special terms and conditions which applied to fixed rate bonds at Derbshire (IOM). This bit relates to whether or not a fixed account could be closed early:

 

11. Save in the circumstances described below, no withdrawals or transfers from any Bond are permitted after the Commencement Date. On the death of the sole holder of a Bond, the Bond may be closed (at the option of the personal representatives of the deceased and subject to compliance with all legal requirements) in which event the capital value of the Bond plus any accrued interest will be payable. We may, in our absolute discretion, permit the closure of, or a withdrawal from, a Bond prior to its maturity, subject to a charge equal to such number of days’ interest (at the rate applicable to the Bond) on the amount withdrawn as may be specified in the Product Terms (or, failing such specification, 180 days’ interest).

 

^^^^ none of that proves anything either way and I am only posting it because it is interesting.

[manshimajin]

Pongo, thanks for that.

 

Not to labour the point too much but it has been striking me in this thread that the Derbyshire BS does not smell of roses in this whole sorry saga (along with the local regulatory authorities). Presumably they were in a financial tight spot (otherwise why transfer good business to KSF) and passed on clients to an Icelandic owned institution at a time when the the amber lights were flashing on Icelandic banking. Given that DBS was in a financial tight spot maybe their management wasn't good enough to spot that Icelandic banking was being identified as high risk. But one would have thought that professional financial managers would have done so. If they were aware that the banking system in the home of the ultimate parent of KSF was looking risky then it is, I would have thought, a matter of grave regulatory concern that they would put their own situation ahead of that of their clients - very irregular practice.

 

Have the regulators investigated the transfer of business from DBS to KSF including the DBS evaluation of the 'risks' associated with the transfer of client money, the state of Icelandic banking and banking regulation and the relationship of KSF to its Icelandic parent? DBS seem to be doing a Pontius Pilot on this matter - but I wonder what some in-depths checks of their records might reveal - and what situation that would place Nationwide in re DBS IOM depositors?

[pongo]

Nationwide are not connected AFAIK Manshimajin. They bought the UK bit only AFAIK. IOM subsidiary was sold separately.

 

I'm sure that wise heads and experts will already have looked at all of this over and over.

 

This thread is possibly in danger of speculating.

 

Presumably they were in a financial tight spot (otherwise why transfer good business to KSF)

 

The parent was in trouble IIRC. Google.

[manshimajin]

This thread is possibly in danger of speculating.

That would be a first!

 

You make it sound like the sale of the IOM business was the last throw of the dice in terms of independent survival for the DBS and it didn't work. Shame they didn't bring it with them into Nationwide. But as they say...that is not what they did....

[pongo]

You make it sound like the sale of the IOM business was the last throw of the dice in terms of independent survival for the DBS and it didn't work.

 

No I don't. You're the one joining up the dots and speculating. For all I know you could be joining the dots up in the wrong order!

 

I don't know anything other than the stuff which I have searched online ^^ as above. I genuinely do not have an opinion. I'm interested. Neutral.

[Sebrof]

I don't know anything other than the stuff which I have searched online ^^ as above. I genuinely do not have an opinion. I'm interested. Neutral.

 

I think you mean disinterested.

 

S

[bellyup]

Pongo, thanks for that.

 

Not to labour the point too much but it has been striking me in this thread that the Derbyshire BS does not smell of roses in this whole sorry saga (along with the local regulatory authorities). Presumably they were in a financial tight spot (otherwise why transfer good business to KSF) and passed on clients to an Icelandic owned institution at a time when the the amber lights were flashing on Icelandic banking. Given that DBS was in a financial tight spot maybe their management wasn't good enough to spot that Icelandic banking was being identified as high risk. But one would have thought that professional financial managers would have done so. If they were aware that the banking system in the home of the ultimate parent of KSF was looking risky then it is, I would have thought, a matter of grave regulatory concern that they would put their own situation ahead of that of their clients - very irregular practice.

 

Have the regulators investigated the transfer of business from DBS to KSF including the DBS evaluation of the 'risks' associated with the transfer of client money, the state of Icelandic banking and banking regulation and the relationship of KSF to its Icelandic parent? DBS seem to be doing a Pontius Pilot on this matter - I wonder what some in-depths checks of their records might reveal - and what situation that would place Nationwide in re DBS IOM depositors?

 

Not surprisingly the Nationwide denied any knowledge of wrong doing prior to their takeover of the DBS.

The DSB IOM directors all got large bonuses after the sale to kaupthing.

The evidence of Mr Tony Shearer ( former CEO at Singer Friedlander)at the TSC meeting in February proves that the FSA was aware of his concerns over the takeover and the ability of Kaupthing to run a bank in a proper manner.

It is not known if these things were discussed with FSC

Of course all these things only came to light after the event .

Ordiary depositors could have no knowledge of these things at all.

[bellyup]

Happy Tynwald Day

 

I hope that all Manx depositors of KSFIOM will take this opportunity to ask some questions.............

 

"Once the deemsters promulgate the laws, individuals may present petitions for the redress of grievances. Petitions are presented at the foot of Tynwald Hill to the Clerk of Tynwald, who conveys them to the Lieutenant Governor. The petitions are then referred to a committee of Tynwald. Thereafter, after the singing of the first verse of the National Anthem, the Deputy Chief Constable of the Isle of Man Constabulary calls the participants individually off the Hill and they proceed to the Chapel."

[scarbunny]

If you want answers that badly why didn't you come over and ask the questions yourself?

[Sebrof]

Have the regulators investigated the transfer of business from DBS to KSF including the DBS evaluation of the 'risks' associated with the transfer of client money, the state of Icelandic banking and banking regulation and the relationship of KSF to its Icelandic parent? DBS seem to be doing a Pontius Pilot on this matter - but I wonder what some in-depths checks of their records might reveal - and what situation that would place Nationwide in re DBS IOM depositors?

 

I very much agree with this. Expanding on it a bit:

 

The issue of how the sale of Derbyshire was handled is the one area where it is far from clear to me that the FSC handled things as well as they might have done. Ironically, it's just about the only thing that Bellache hasn't mentioned. He has been so busy slinging mud in every direction that this has been overlooked - until now.

 

The questions I would like to see answered are:

 

1 What did the FSC know about the position of Kaupting when the purchase of Derbyshire Offshore was approved?

2 Following 1, if there were any adverse reports on Kaupting (and I'm not clear that there were), what was the rationale for allowing the purchase to proceed?

3 Did the FSC consider whether those locked into Derbyshaire should be permitted a Get-out card, given that an old British Building Society is likely to be regarded by depositors as a safer haven than a rapidly-growing foreign (indeed non-EU) bank?

4 Should the FSC have required Kaupting/Derbyshire to notify all depositors to enable them to review their position?

 

An answer to a request under the Freedom of Information Act shows that the UK gov. was not concerned in the sale, and therefore there may be have been little or no exchange of information between the FSA and FSC.

 

Elsewhere I have read that Kaupting/Derbyshire saw no need to notify depositors of the deal. Well, they wouldn't, would they?

 

All in all, I agree with you that the whole question of what happens to customers when a deposit-taker changes hands (and therefore management) needs to be addressed.

 

S

 

ETA: Nationwide, of course, weren't involved. It's the FSC's involvement that needs looking at.

[bellyup]

If you want answers that badly why didn't you come over and ask the questions yourself?

 

 

Because to ask for 'redress of grievances' on Tynwald Day you have to be a Manx resident.

 

However many depositors have traveled to the IOM numerous times since Oct 8th 2008 to ask questions .

 

Others who cannot go have contributed to the expenses of others who have gone.

 

As you can appreciate its not easy especially if you live far away and had your savings................ well you know the rest.

 

The DAG ( depositors Action Group ) also employed Manx advocate John Wright to ask the questions for us.

[piebaps]

Any KSF petitions would be ruled out of order in any case. The redress petition is supposed to be an action of last resort and as the liquidation process is ongoing, the last resort has yet to be reached. I woulda thought though Bellyup that someone in DAG would have presented something. All the petioners were interviewed by the IOM press and BBC northwest they even handed the journos copies of their petitions.

 

It would have been some free publicity if nothing else. You guys must be too busy with your infighting I suppose

[manshimajin]

The issue of how the sale of Derbyshire was handled is the one area where it is far from clear to me that the FSC handled things as well as they might have done. Ironically, it's just about the only thing that Bellache hasn't mentioned. He has been so busy slinging mud in every direction that this has been overlooked - until now.

 

Elsewhere I have read that Kaupting/Derbyshire saw no need to notify depositors of the deal. Well, they wouldn't, would they?

 

All in all, I agree with you that the whole question of what happens to customers when a deposit-taker changes hands (and therefore management) needs to be addressed. S

Sebrof, I would have thought that this would have been a critical area of investigation for the DAG - in particular what contact there was between the FSC, Derbyshire and KSF as this sale went through. I am surprised that the FSC did not see a need for Derbyshire to communicate with its members about their options. Like you I think that moving funds to a non-EU owned bank is a significant matter for depositors. Where is the line drawn on something like this? What would the FSC position be if the bank was owned by a bank parent in say Colombia? Whilst the FSC regulated KSF how confident were they of the regulation of the parent? (Very!)

 

I have recently had a raft of communications from Aviva to tell me that they are changing their marketing name from Norwich Union to Aviva. I have a small general insurance policy with them. If a UK insurance company has to go to that expense on a name change it is amazing that such a significant (for the depositors) ownership change as Derbyshire to KSF can take place with no communication with the depositors whatsoever!

 

It is surprising if none of the more 'sophisticated' depositors asked the question - presumably some did.